Problem

Average Cost Company A has 50% of its total variable manufacturing cost in labor and...

Average Cost Company A has 50% of its total variable manufacturing cost in labor and the other 50% in fuel. Company B has 80% of its total variable manufacturing cost in labor and the remainder in fuel. Suppose in a given year labor costs rise 5% and fuel costs rise 10%.

Required Which company has the higher percentage increase in total variable cost?

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